Endochondral bone formation involves condensation and differentiation of mesenchymal cells into chondrocytes followed by chondrocyte proliferation, maturation, hypertrophic differentiation and apoptosis. Each step of the endochondral bone formation process is precisely regulated by local growth factors, signaling molecules and transcription factors, including TGF-b, b-catenin and Runx2. TGF-b promotes chondrocyte proliferation but prevents chondrocyte differentiation and hypertrophy. The molecular mechanisms of TGF-b action in chondrocytes are not fully understood. In preliminary studies, we have made two key novel discoveries: 1) TGF-b activates b-catenin signaling in chondrocytes in a Smad5-dependent manner and TGF-b-induced cyclin D1 expression is mediated by b-catenin;and 2) cyclin D1 induces Runx2 phosphorylation and degradation. In the proposed studies, we will use comprehensive molecular and genetic approaches to investigate the molecular mechanisms through which TGF-b activates b-catenin signaling and inhibits Runx2 function in chondrocytes. The underlying hypothesis for this proposal is that TGF-b stimulates chondrocyte proliferation by increasing cyclin D1 expression which in turn inhibits Runx2 function, thereby preventing onset of chondrocyte differentiation. Two specific aims are proposed in this application. In specific aim 1, we will determine the mechanisms of TGF-b-induced b-catenin signaling during chondrocyte proliferation. We will 1) identify the specific domain of b-catenin that binds to Smad3 and examine if Smad3 interaction prevents b-catenin degradation;2) determine whether Smad3 enhances b-catenin nuclear translocation;and 3) investigate the mechanisms through which Smad3 and b-catenin cooperatively activate cyclin D1 gene transcription in chondrocytes. In specific aim 2, we will define the molecular mechanism through which cyclin D1 mediates Runx2 degradation in proliferating chondrocytes. We propose 1) to determine if cyclin D1 induces Runx2 phosphorylation and degradation in chondrocytes;2) to identify the specific E3 ubiquitin ligase responsible for cyclin D1-induced Runx2 ubiquitination;and 3) to determine the role of Cdks and Cdk inhibitor in Runx2 degradation and chondrocyte differentiation. The findings from proposed studies will provide novel insights into the role of TGF-b in growth plate chondrocyte development and the mechanisms controlling endochondral bone formation.